The Implications of the Supreme Court “Hobby Lobby” Decision on Businesses

The U.S. Supreme Court’s decision in the “Hobby Lobby” case has several implications for businesses that are just beginning to unfold, including one that affects the bottom line.

July 3 2014 by Dale Buss


In the decision, the justices ruled 5 to 4 that for-profit companies can use religious objections to avoid paying for contraception coverage required under Obamacare. It allows some employers to opt out of covering contraception on religious grounds and gives corporations further treatment as “persons” under U.S. law, enhancing their free-speech and free-exercise rights.

CEOs and business owners should look for ramifications at “the intersection of two categories that can get companies in trouble—religious views and family planning,” Pamela Skillings, a workplace expert in New York City who provides interview coaching to job seekers and employers, told The Wall Street Journal.

“The evidence suggests that denying contraception coverage can hurt the bottom line. Employee pregnancies cost firms much more than contraception.”
John Aziz, The Week

It is illegal for companies to ask prospective employees about their religious views, but individuals are free to question hiring managers and human-resources representatives about anything at all, including owners’ religious beliefs and their impact on anything from benefits to corporate culture, the newspaper said.

In addition, millennials are including companies’ social and sustainable values in their career choices, and are not afraid to ask where a company stands on a variety of issues. Now, when an HR managers asks, “Do you have any questions?” of a candidate, they may find themselves in the position of knowing whether they do or they don’t on this issue. Therefore, leaders must spearhead their company’s position on the matter and whether to offer or not, and should instruct their HR representatives and publicists to prepare a response to the question that is in line with the company’s mission and consistent across all divisions and departments.

Meanwhile, there are specific areas in which the Supreme Court decision could have some immediate impact. Christian conservatives who have been watching the case said the decision would help in their effort to battle state actions against businesses in Oregon that don’t want to serve gay weddings, according to The Oregonian.

The Week cautions, however, that business owners and CEOs shouldn’t be so eager to follow the path of opportunity laid out by the decision. “The evidence suggests,” John Aziz wrote, “that  denying contraception coverage can hurt the bottom line. Employee pregnancies cost firms much more than contraception.”

A study in 2000 by the National Business Group on Health estimated that not providing contraceptive coverage in employee health plans ends up costing employers 15 percent to 17 percent more than providing such coverage, after factoring in both the direct medical costs of pregnancy and indirect costs such as employee absence and reduced productivity, according to The Week.

Aziz also warned that executives, including Hobby Lobby retailer founder and CEO David Green, while now exultant over the Supreme Court ruling, might not be so happy about the victory later on. “There could be a backlash … against Hobby Lobby and any other firm that is seen as being hostile to women’s interests,” Aziz wrote, citing polls that show 53 percent of Americans disagreed with the Supreme Court decision. “That could translate into a big chunk of Hobby Lobby’s business.”

Additional reading:

Why the Hobby Lobby decision is bad for business

Hobby Lobby decision: 5 takeaways

Wider impact of Hobby Lobby ruling?

What’s Next? How Hobby Lobby Affects Wheaton College and Nearly 100 Other Cases

Hiring Process Just Got Dicier

Will Hobby Lobby decision affect business owners who don’t want to serve gay weddings in Oregon?